IG cashes in as anarchist traders battle Wall Street
TRADERS who bought in to the so-called Gamestop trend early enough have made a small fortune over the past few weeks.
But they’re not the only people seeing the money flood in. Trading firm IG Group raked in record revenues over the three months to February 28, as customers flocked to its platform to try and take advantage of the craze.
Trading revenues at IG were up 65pc on the same time a year earlier, at £230.3m, as a record 230,100 customers joined over the quarter.
The company saw a huge spike in new clients joining in late January and early February, when the Gamestop trend began.
The phenomenon saw hordes of small investors pile into Gamestop – a relatively obscure US stock – to drive up its price and cause hefty losses at the hedge funds which had been betting against it.
As market veterans were stunned by the show of financial anarchy, largely coordinated on social media site Reddit, newer and younger investors who had never traded before tried to get in on the game. IG’s revenue over the first nine months of its financial year is now up 66pc on the same time a year earlier, at £647.1m.
The group’s boss, June Felix, said she was ‘delighted with the excellent results’. So were shareholders, as the stock climbed 4.9pc, or 39.5p, to 850.5p.
UK markets continued their muted week, with the FTSE 100 up 0.2pc, or 11.36 points, to 6736.96 and the FTSE 250 up 0.6pc, or 126.43 points, to 21533.1 points.
The blue-chip index was boosted by rising mining stocks, after the US House of Representatives passed a vast $1.9 trillion (£1.3bn) Covid relief bill which heated up commodity prices. Anglo American
jumped 4.6pc, or 132.5p, to 2989.5p, Fresnillo lifted 2.7pc, or 25.4p, to 956.6p, Antofagasta climbed 2.6pc, or 43p, to 1731p and Rio Tinto edged up 2.3pc, or 132p, to 5781p.
HSBC was one of the largest drags on the index, falling 4.7pc, or 21.05p, to 425.05p after being downgraded to a ‘sell’ rating by analysts at Investec.
Lenders more broadly were under pressure, after the European Central Bank announced it would speed up its bond-buying to combat rising yields.
Rising yields – effectively the interest rate that the bond pays – are good news for banks, because they imply that interest rates will climb and banks can charge more money for lending.
But falling yields send bank stocks down. Standard Chartered slipped 1.9pc, or 9.5p, to 484.5p, while Natwest was off 0.5pc, or 0.95p, to 186.9p.
Astrazeneca was also losing ground after several European countries halted the roll-out of its Covid vaccines, citing deaths of people who had been inoculated and who later suffered from blood clots.
Shares in the pharmaceutical giant slid 2.5pc, or 181p, to 7011p.
On the FTSE 250, IG Group’s success sent rival CMC Markets soaring by 8.4pc, or 32p, to 414p.
Landscaping company Marshalls leapt after it revealed customers had been splashing out on their garden improvements during lockdown.
Revenue for 2020 was down from £541.8m to £469.5m, due to the impact of Covid-19, while profits took an even bigger hit, falling from £73.5m to £9.4m as the firm invested in manufacturing efficiency and cost cutting.
But in the second half of the year, sales to home customers doing up their patios and driveways shot up 9pc compared to the previous year.
Marshalls added that business in 2021 had kicked off well, and it was raising its expectations for 2021. It also reinstated its dividend at 4.3p a share, causing the stock to jump by 8.2pc ,or 57.5p, to 755.5p.
EOIN MORGAN left no doubt yesterday about the importance of Jofra Archer to England’s World Cup aspirations as he prepared to welcome his prize fast-bowling asset back for today’s first Twenty20 international.
Archer returns to the white-ball game where he’s had the bulk of his success after the elbow problem that saw him miss two Tests against India and raised fresh concerns about his longevity and even commitment to the longer game.
Archer this week expressed his frustration at comments from those who ‘don’t know what makes me tick’, but clearly Morgan is not among them.
And he insists he knows how to get the best out of a rare talent who, so far in his short England career, has invariably looked happier with a white ball in his hand than a red one.
‘Jofra is a huge asset in any form of the game,’ said Morgan ahead of today’s first of five short-form games against India in Ahmedabad. ‘He obviously has express pace, can bowl cutters, variations and a very good yorker.
‘He is threatening whenever he comes on and, if you look at his T20 performances, they suggest he will have a significant role to play when it comes to the World Cup.’
Asked if Archer is easy to manage, Morgan replied: ‘Yes he is. The more I have got to know him, the better our relationship has become and the more I have grown to enjoy his company away from the game.
‘He’s always been engaging and is a very funny guy. Jofra is younger than most players in our squad and has different interests to many of them but he loves playing cricket in front of big crowds and enjoying what he does.’
Archer will be part of a fullstrength England side today in front of what is expected to be a crowd of 80,000 at the biggest cricket stadium in the world and Morgan says it is right his T20 team have been prioritised ahead of October’s World Cup.
‘Before we went to South Africa in November, we hadn’t had our first-choice side available for a long time,’ said Morgan. ‘So we earmarked this tour specifically as preparation for the World Cup and I’m grateful for that. I don’t see any time during this summer where it will happen again.’
That World Cup preparation, Morgan says, includes the thorny subject of the Indian Premier League. Unsurprisingly, he believes his best players are right to commit to a full IPL campaign rather than rest after this T20 World Cup dress rehearsal series and the three 50-over matches that conclude the India tour.
‘The IPL is huge in terms of the development process players go through rubbing shoulders with the best in the world and being exposed to the pressures of being an overseas player at the biggest franchise competition,’ said Morgan.
‘The value of them being there, given it’s the year of a World Cup that is also being played in India, is brilliant.’
Morgan was reluctant this week to give the exiled Alex Hales encouragement over his chances of forcing his way back into the T20 squad in time for the World Cup. But there were positive words yesterday for another batsman who hasn’t played in the T20 side for two years for very different reasons in Joe Root.
‘Joe was a big part of us getting to the final of the 2016 T20 World Cup,’ said Morgan. ‘He is under huge strain doing what he does as Test captain, so he has needed a rest. But Joe could be an option come the World Cup.’